This year's show, however, will be different in one key respect: The iPad.
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2409500More quote details and news »aaplinYour ValueYour ChangeShort position
(ticker: AAPL) will skip the event, as usual, but its gadget will cast a long shadow. Last January, the iPad was just a rumor, albeit a decidedly hot rumor. This year, it is a reality, with sales expected to reach 14 million or so units for all of 2010, and double that or more in 2011. The industry must respond.

Every major computer vendor will offer up tablets in a dizzying array of configurations, with 7-, 9-, 10-, and 12-inch screens. Some of these computers will represent amazing second acts. For example, it's widely believed that
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355334More quote details and news »HPQinYour ValueYour ChangeShort position
(HPQ) will show off tablets running the Palm operating system, which it acquired with the purchase of the smartphone maker of the same name last year.

An amusing "teaser" video for CES put out by Motorola a week ago compared the iPad to the Rosetta Stone: a historic slate, but one Moto apparently considers ancient by its own forward-looking standards.

THIS WILL REALLY BEGoogle's
(GOOG) show, in some respects. Its Android operating system will power the vast majority of these tablets. Google's tablet version of Android, code-named "Honeycomb," isn't actually available yet; it's expected later in the first half of this year.

But there will likely be numerous demonstrations showing where the software's at. If anything can challenge the dominance of the iPad, it is Google's code, no matter which of the many pieces of hardware end up succeeding.

Microsoft's (MSFT) resurgence as a tablet vendor brings a touch of nostalgia to the show. Microsoft has been offering tablet computers for a decade now, but none have caught on in a big way. The company is rumored to be readying a bevy of slates running a version of Windows. Speculation is that it will be a new version of the operating system with amendments made to suit the particulars of touching the screen to move icons, rather than using a mouse and keyboard.

The most hotly debated of all the tablets at the show will be the PlayBook from BlackBerry-maker
Research in Motion
(RIMM), which won't actually be put on sale till sometime in the second quarter of next year. There's been so much leaked about the device, and rumored, that debating its fate sends Internet chat rooms into spasms of nationalistic apoplexy. (RIMM is a Canadian company.) I expect some rumors will be put to rest about the PlayBook at CES, while entirely new ones will be started.

Intel seems to have a lead on the number of tablet deals it has signed for its microprocessors. Craig Ellis with Caris & Co. wrote last week that his research shows the company with 18 design "wins." That's fewer than the 35 that Intel has claimed, but it's still more than the 14 that Ellis credits to Nvidia, the 6 he estimates for TI, and the 5 Qualcomm may have.

WHAT IS ONE TO MAKE OF INTEL? Its shares trade at 10 times next year's projected earnings, a multiple that seems too low for a company that still has some of the most sophisticated chip design expertise and manufacturing prowess in the industry. Intel has $4.05 per share in net cash, though that will be reduced by the pending purchase of software maker McAfee. Intel's shares have a dividend yield of 3.4%.

On the other hand, Street estimates for Intel show earnings per share falling next year, and just about everyone agrees that tablet computers are already eating into the traditional PC market, where Intel dominates and where it commands much higher prices for its chips.

Daniel Berenbaum of Auriga Securities, who's bullish on the company, says that what Intel loses on the desktop, it may make up for in sales of chips for servers. "We're in the midst of putting an awful lot of underpowered devices [tablets and smartphones] in people's hands," Berenbaum observes. "They'll want to do things that can't be done natively on the device, and you will need a big server somewhere to do that computing," presumably with a big Intel chip.

Caris's Ellis, who's also bullish, says that Intel has a very good tablet chip in its Atom line of processors, one that will get better later in 2011 as a move to smaller features improves the power efficiency of Atom.

Still, Adam Benjamin of Jefferies & Co. says Intel will likely trade sideways in 2011 because the entire economics of the business have changed drastically.

"Atom was $30 to $40 in some netbook computers," he observes, but Nvidia's "Tegra 2" processor is expected to be sold to tablet makers for just $25.

"You think about that world, and how do you compete?" he asks. "You'd have to sell three times the volume to get back to the same revenue level. That's the structural problem they've got going against them."

Benjamin makes a good case for all the knocks against Intel, but I still think the stock price and the dividend and the cash make the shares worth a bet. If anything goes right for Intel in 2011, its multiple could improve from here.

What else will we see at CES? How about the world's largest 3-D television from LG Electronics (066570.Korea), measuring 72 inches? LG is also expected to show off the world's smallest 3-D TV, a portable model.

There will be any number of devices trying to replicate
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2494690More quote details and news »NFLXinYour ValueYour ChangeShort position
(NFLX) success with streaming movies and TV shows. I expect these devices will amuse and intrigue us, but also cause a great deal of confusion among consumers. I'll be back in this space next week to let you know how it all went.

Happy Old Year

The Nasdaq had its best December since 1999's 22% rally in the year's final month.